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Kasukuwere heartened by Impala offer


Zimbabwe Youth Development, Indigenisation and empowement minister Saviour Kasukuwere said he had received an offer from Impala Platinum regarding its plans to meet the country’s indigenisation legislation and that he was hopeful the sides were “on a good course”.

Impala Platinum owns 87% of Zimplats, a high margin platinum miner operating in Zimbabwe’s Ngezi region. Shares in Impala were marginally down 0,23% at R188,51/share.

Impala Platinum is thought to be discussing the situation with Zimbabwe at a group board meeting today and is planning to meet representatives of the Zimbabwean government on November 21, according to Kasukuwere.

“We received the plan on time and I’m hopeful that we’re on a good course now,” Kasukuwere told Miningmx. The minister was also discussing Unki’s indigenisation proposal which had also now been submitted. Unki is operated by Anglo American.

In terms of Zimbabwe indigenisation legislation, 51% of all foreign companies’ assets in Zimbabwe, with turnover in excess of $500 000 a year, have to be sold to indigenous parties by 2015.

“People may have their personal views, but this is the law of our country,” Kasukuwere said in a previous interview with Miningmx on the non-negotiable requirement to complete an indigenisation plan. “Mining companies must understand that this is a new beginning for Zimbabwe. They cannot continue to colonise our minerals,” he said.

Impala missed one of many deadlines that had been imposed by the Zimbabwean government in October for completion of its indigenisation plans, with a new date of November 15 set as the final target.

The unknown factor, however, is the content of Impala’s offer. Zimbabwe is known to be dissatisfied with the terms of an agreement signed between it and Impala in 2006 when current Impala Platinum CEO David Brown was the company’s financial director.

In terms of the deal, Impala agreed to release some 51 million ounces of platinum or 99 million ounces of 4E (platinum, palladium, rhodium and gold).

Impala said at the time, these minerals were outside its long-term expansion programme of its Zimplats subsidiary, which was then of about one million ounces over a 50-year life of mine.

Zimplats was to receive an empowerment and cash credit of $153m for the release of the mineral-bearing ground. It was unclear at the time, if 51% local ownership would be made to stick; now that it will, Impala is working to top up the offering to the Zimbabwean government.

Unfortunately, the negotiations are being held up by the interesting observation by Zimbabwe that the ounces given back to it in the release of ground agreement are not worth as much as the ounces Zimplats is currently mining.

The Zimbabwe government bases its view on a dollar per resource ounce valuation. It’s unknown how this will play out, but one solution mooted among analysts is the Zimbabwean government may agree to a joint venture structure with the likes of Impala Platinum as well as its rival, Anglo Platinum (Unki mine).

In terms of the joint venture, structure miners would agree to the government becoming a partner on a 51% basis, but allowing the miners to increase their share in the assets from that base as and when capital on expansions is spent.

That would enable the Zimbabwe Cabinet to announce it had achieved its 51% goal while providing miners with comfort to grow expansion.

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